Brokers say stamp duty continues to erode deposits and deter movers, despite Burnham's decision to leave the tax untouched
Andy Burnham has ruled out any changes to stamp duty at the autumn Budget, leaving mortgage brokers divided over the decision. Some say it averts disruption, others argue the levy continues to hold the market back.
The new prime minister confirmed on Monday the government would not be overhauling stamp duty land tax (SDLT), drawing a line under weeks of speculation following his arrival at Downing Street on 20 July.
How does stamp duty hold the market back?
For Rhys Edwards (pictured top left), mortgage consultant at Brooks Financial, the levy's impact is felt most acutely by clients who lack the relief available to first-time buyers.
"To be honest, I do feel like it does hold the housing market back," he told Mortgage Introducer. "Your home movers, they really get hit because they haven't got the first-time buyer's allowances. It is a huge expense on top of everything else of buying and selling a property."
Edwards highlighted the practical effect on loan-to-value ratios. A client who believes they have £100,000 in equity may see that figure eroded sharply once stamp duty is factored in alongside estate agent and solicitor fees.
"That's the best part of £10,000 there, you're buying X amount of property, that's another £20,000 stamp duty," he said. "So, actually you've not got a £100,000 deposit, you've got £80,000, which puts you at 85%, which means your payments are this amount."
The result, he said, can be enough to make a client pause entirely and wait until they have built up further savings.
A regional divide
The geographic split is a recurring theme. Analysis by Zoopla found more than four in five home movers paid stamp duty in every English region except the North East, and in southern England, some transactions do not proceed when moving costs reach five figures. London first-time buyers are eight times more likely to pay stamp duty than those in the North East, with 79.7% liable for the tax.
Edwards said northern clients will often consciously target properties below the threshold to keep costs down, while London clients frequently have no such option.
"Obviously, they've got the minimum allowance there, which doesn't get you much in London," he said. "So, they are being pushed into having to pay stamp duty more. Whereas my north-based clients, many will try and limit themselves to under the £300,000 first-time buyer threshold when purchasing."
He argued adjusting thresholds or bandings would generate more market activity and more tax revenue in the long run. The picture is harder still for buy-to-let investors. Research by Hamptons estimated there are 2.2 million fewer privately renting households than would be expected had pre-2016 growth continued, with 25.4% fewer homes available to rent in February this year than a decade earlier. Edwards described the additional properties surcharge, currently at 5%, as "horrendous", arguing rental stock remains essential and that penalising landlords constrains supply.
Should stamp duty have been left alone?
Not every broker views the freeze as a problem. Nouran Moustafa (pictured top right), executive financial and mortgage adviser at Roxton Wealth, argued the decision was correct, but for reasons beyond market optics.
"The stamp duty, it's not affordable," she told Mortgage Introducer. “It delays people from buying homes, and the only loser because of the stamp duty is the consumer."
She argued that banks have little incentive to see SDLT abolished. A buyer who does not pay stamp duty puts more into their deposit, borrows less, and pays less interest. "If we go cut stamp duty and remove this massive revenue from the government, who's going to pay for this?" she said.
She is clear any sudden move to scrap the tax would be far more damaging than the status quo, drawing a comparison to the Liz Truss mini-Budget shock of September 2022.
"If Burnham goes to scrap stamp duty, we will wake up in the morning to a financial crisis," she said. "If he scraps stamp duty, who's going to fund everything else?"
Moustafa pointed to what she described as more pressing Budget priorities, reversing the employer national insurance rise introduced under former chancellor Rachel Reeves in 2024 and unwinding changes to pension inheritance tax planning.
"What we actually need to do is take a U-turn on Reeves's decision for the first-time buyer reforms that she brought in," she said. "Now is not the right time for stamp duty changes. The priority is to release the pressure from the Bank of England and get Britain working again."
Edwards acknowledged stamp duty reform would be complex. "It's easy to say what the impact on the market would be," he said. “Reducing stamp duty prices would help the mortgage market and the property market move forward, but the implications on how else it would be funded, that's really difficult."
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